UNITED STATES of America ex rel. Frankie Carolyn RODGERS and Delbert O. Lewis, Plaintiffs-Appellees; United States of America, Intervenor on Appeal, v. STATE OF ARKANSAS and Arkansas Department of Education, Defendants-Appellants, Little Rock School District; Benton School District; Magnet Cove School District; Hope School District; Mаlvern School District; and Gurdon School District, Defendants.
No. 97-1940.
United States Court of Appeals, Eighth Circuit.
Submitted June 10, 1998. Decided Sept. 4, 1998.
154 F.3d 865
IV.
CVC also claims that the NFL tortiously interfered with its contract with the Rams by charging the $29 million relocation fee after initially voting down the Rams’ application to move. CVC argues that it was forced to pay the fee because of economic duress and that the required fee made its obligations to the Rams substantially more burdensome. The NFL responds that CVC fаiled to establish several of the essential elements of a tortious interference claim under Missouri law. The district court dismissed this claim because of lack of evidence of a breach induced by the NFL‘s conduct or of any intentional interference.
Missouri law requires a plaintiff alleging tortiоus interference with a contract to prove “(1) a contract or valid business expectancy; (2) defendant‘s knowledge of the contract or relationship; (3) a breach induced or caused by defendant‘s intentional interference; (4) the absence of justification; and (5) damages.” Rice v. Hodapp, 919 S.W.2d 240, 245 (Mo.1996)(en banc). CVC presented no evidence that the NFL‘s imposition of a high relocation fee caused a breach in its contract with the Rams. Despite having the option to terminate its contract with the Rams once it was decided that the fee would exceed $7.5 million, CVC agreed to pay the fee in order to be sure the Rams would play in St. Louis in 1995, the target year it had set. There was also no evidence that the intent behind the NFL‘s fee was to disrupt the contract between CVC and the Rams. It is not even clear that the team owners knew about the contract at the time the fee was set. CVC contends, however, that the NFL can be liable for tortious interference even without a breach if it caused the performance of the contract to be more burdensome and expensive, citing Restatement (Second) of Torts, § 766A. CVC points to no Missouri authority which has recognized this theory, and a federal cоurt ruling on a point of state law is obligated to follow the law as announced by that state‘s highest court. Gilstrap v. Amtrak, 998 F.2d 559, 560 (8th Cir.1993); Carman v. Harrison, 362 F.2d 694, 698 (8th Cir.1966). To adopt CVC‘s theory would be contrary to the Missouri requirement that a plaintiff prove that the defendant induce a breach of contract. Since CVC did not make out the required elements of this state tort, appellees were entitled to a judgment as a matter of law on it.
V.
CVC had ample opportunity to prove the causes of action that are the subject of its appeal, and it took some four weeks to put in its evidence at trial. The many legal issues were briefed and argued by the parties before the district court ruled on them. Since CVC failed to produce sufficient evidence to make out essential elements required under Section 1 of the Sherman Act and under Missouri law on tortious interference, the league and the member teams were entitled to judgment as a matter of law. CVC has not shown on its appeal that it should have a new trial, and the cross appeal is dismissed as moot. Accordingly, we affirm the judgment of the district court.
Michael F. Hertz, Department of Justice, Washingtоn, DC, argued (Frank W. Hunger, Paula Jean Casey, Douglas N. Letter, and Michael E. Robinson, on the brief), for United States.
James D. Kennedy, Russellville, AR, argued, for Appellees.
Before RICHARD S. ARNOLD and MORRIS SHEPPARD ARNOLD, Circuit Judges, and PANNER,1 District Judge.
RICHARD S. ARNOLD, Circuit Judge.
Two Arkansas residents brought this qui tam action against the State of Arkansas and the Arkansas Department of Education for allegedly obtaining federal education funding by filing false claims of compliancе with federal civil-rights laws, in violation of the False Claims Act,
Arkansas residents Frankie Carolyn Rodgers, a former public school teacher and counselor, and Delbert O. Lewis, a former employee of the Arkansas Division of Rehabilitation Services, undertook an investigation into whether the State, its Department of Education, and several Arkansas school districts were in compliance with federаl civil-rights laws. Rodgers and Lewis allege that the defendants have falsely claimed compliance with § 504 of the Rehabilitation Act of 1973, as amended,
Asserting immunity from suit under the Eleventh Amendment, the State and the Department moved to dismiss the complaint. The District Court2 determined that the State does not enjoy Eleventh Amendment immunity from False Claims Act suits by qui tam relators, and denied the motion to dismiss. The State and the Department appeal from the denial of the motion to dismiss, and the District Court stayed the proceeding pending the outcome here. We have jurisdiction because denials of motions to dismiss on Eleventh Amendment immunity grounds are immediately appealable. Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147 (1993).
II.
On appeal, the State acknowledges that the United States is not subject to the Eleventh Amendment prohibition on federal jurisdiction over “commence[ment] or prosecution] [of a suit] against one of the United States by Citizens of another State ...,” or over a suit against a State by one of its own citizens.
Section 3729 of the False Claims Act provides, in pertinent рart:
(a) Liability for certain acts.—Any person who—
(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government ... a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid; . . . .
is liable to the United States Government for a civil penalty ... plus 3 times the amount of damages which the Government sustains because of the аct of that person....
Section 3730, the qui tam3 provision of the False Claims Act, states in pertinent part:
(b) Actions by Private Persons.—(1) A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The action shall be brought in the name of the
A great deal of Section 3730 establishes as superior the role of the government in the prosecution of qui tam suits. For example, the government may intervene in the action, and in the event thаt it elects not to do so within an initial 60-day period, it may, for good cause, intervene at a later date.
We hold that a qui tam action under this Act is a suit by the United States for Eleventh Amendment immunity purposes. The focus of the Act is on exposing fraud on the government and recovering resulting government losses. The qui tam provisions facilitate this process, but they do not alter the underlying character of the action as one for the aggrieved party as defined by the statute. See Marvin v. Trout, 199 U.S. 212, 224-26 (1905). The qui tam mechаnism exists to motivate individuals to further the interest of the government in remaining free from frauds perpetrated against it. Confronting the same question before us, the Fourth Circuit stated, and we agree, that “the structure of the qui tam procedure, the extensive benefit flowing to the government from any recovery, and thе extensive power the government has to control the litigation weigh heavily against [the defendant].” United States ex rel. Milam v. University of Texas M.D. Anderson Cancer Ctr., 961 F.2d 46, 49 (4th Cir.1992).
Other circuits have held similarly. ”Qui tam relators cannot and do not sue for FCA violations on their own behalf. Rather, they sue on behalf of the government as agents of the government, which is always the real party in interest.” United States ex rel. Hyatt v. Northrop Corp., 91 F.3d 1211, 1217 n. 8 (9th Cir.1996) (citing United States ex rel. Killingsworth v. Northrop Corp., 25 F.3d 715, 720 (9th Cir.1994)). See also United States ex rel. Hall v. Tribal Dev. Corp., 49 F.3d 1208, 1213 (7th Cir.1995). Many of our sister circuits have rejected challenges to a qui tam relator‘s action on similar reasoning. “In a qui tam action, the plaintiff sues on behalf of and in the name of the government and invokes the standing of the government resulting from the fraud injury.” United States ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148, 1154 (2d Cir.), cert. denied, 508 U.S. 973 (1993). In so stating, the Second Circuit drew from an earlier case in which it stated “although qui tam actions allow individual citizens to initiate enforcement against wrongdoers who cause injury to the public at large, the Government remains the real party in interest.” Minotti v. Lensink, 895 F.2d 100, 104 (2d Cir.1990). In a similar vein, the Fourth Circuit in Milam stated “[w]e could not lightly conclude that the party upon whose standing the justiciability of the case depends is not the real party in interest.” 961 F.2d at 49.
Finally, we address the State‘s and the Department‘s argument that our recent decision in Moad v. Arkansas State Police Department, 111 F.3d 585 (8th Cir.1997), is dispositive of an outcome in their favor. In Moad, we held that the Eleventh Amendment is a bar to a suit against a state for violations of the Fair Labor Standards Act. Our decision was required by that of the Supreme Court in Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996), that the Interstate Commerce Clause is an impermissible basis for the abrogation of state immunity under the Eleventh Amendment. Moad is not controlling. There, the real party in interest was a private person. Here, it is the United States. The State and its agencies are not entitled to Eleventh Amendment immunity.
The judgment is affirmed.
The Eleventh Amendment provides that:
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or proseсuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
(Emphasis added.) This action was commenced, and is being prosecuted, by two private citizens. The United States was not consulted before this action was filed. It did not screen the claims before filing to ensure that prosecution was warranted, and it has since declined to prosecute this action in its own right.1 If the United States intervenes, it is not bound by anything the relators have done.
Based upon the decisions cited in the majority opinion, the majority understandably concludes that this аction against a state is not barred by the Eleventh Amendment. However, those cases primarily involve issues of standing, or are premised upon other decisions that involve standing. They speak in terms of the “real party in interest.”
United States ex rel. Kelly v. Boeing Co., 9 F.3d 743 (9th Cir.1993), discusses the relationship between the United States and the relator in an action under the False Claims Act:
[T]he FCA effectively assigns the government‘s claims to qui tam plaintiffs such as Kelly, who then may sue based upon an injury to the federal treasury. Under this theory of standing, the FCA‘s qui tam provisions operate as an enforceable unilateral contract. The terms and conditions of the contract are accepted by the relator upon filing suit. If the government declines to prosecute the alleged wrongdoer, the qui tam plaintiff effectively stands in the shoes of the government.
Id. at 748. Others have likened the relationship to an assignment of a contract or chose in aсtion, or a collection agency, bounty hunter, or contingency fee relationship. See, e.g., United States ex rel. Milam v. University of Texas M.D. Anderson Cancer Center, 961 F.2d 46, 49 (4th Cir.1992) (endorsing contingency fee analysis).
“Standing in the shoes of the assignor” may suffice to confer standing to sue or to overcome a contractual defense, but only the Unitеd States itself should be able to pierce a state‘s sovereign immunity, not its collection agencies, assignees, bounty hunters, or delegees. Milam‘s answer was that:
Congress has let loose a posse of ad hoc deputies to uncover and prosecute frauds against the government. States and state agenсies ... may prefer the dignity of being chased only by the regular troops; if so, they must seek relief from Congress.
Id. at 49. That misses the mark. It is not a question of “dignity” but of whether the limited waiver of sovereign immunity, that is inherent in the design of the Constitution, extends to self-appointed “ad hoc deputies” who are largely beyond the supеrvision of the United States and for whose actions the United States is not accountable. “The consent, ‘inherent in the convention,’ to suit by the United States—at the instance and under the control of responsible federal officers—is not consent to suit by anyone whom the United States might select; and even consent to suit by the United States for a particular person‘s benefit is not consent to suit by that person himself.” Blatchford v. Native Village of Noatak, 501 U.S. 775, 785-86 (1991).
The Supreme Court has expressed reservations about limiting the Eleventh Amendment in other types of cases. See Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996) and Blatchford, supra.
The present action is distinguishable from United States ex rel. Zissler v. Regents of the University of Minnesota, No. 97-4099MN, also decided today. In Zissler, the United States has intervened and is prosecuting that action at the instance, and under the control, of responsible federal officials. The same cannot be said of the claims here. I therefore respectfully dissent.
RICHARD S. ARNOLD
Circuit Judge.